TMI Blog2022 (12) TMI 1487X X X X Extracts X X X X X X X X Extracts X X X X ..... d Championships Ltd. [ 2017 (4) TMI 1109 - SUPREME COURT] , in the case of Azadi Bachao Andolan [ 2003 (10) TMI 5 - SUPREME COURT] and also E-funds IT Solutions [ 2017 (10) TMI 1011 - SUPREME COURT] - The facts on record undisputedly prove that the premises AHL are at the disposal of the assessee for conduct of their business. While coming to the issue of at the disposal in the premises is available for the assessee for running of their business even for a limited time it constitutes a PE - Decided against the assessee. Attribution of profits to alleged PE of the Appellant in India inspite of entity level operating losses - alternative taxation of India source income as Royalty under Section 9(l)(vi) of the Income Tax Act, 1961 ( the Act ) and Article 12 of the Tax Treaty - We find that the identical issue raised in the present appeal, has already been adjudicated in [ 2021 (7) TMI 1440 - ITAT DELHI] to hold that the revenue's earned by the assessee are taxable under Article 12 of the DTAA. Regarding the determination of the profit, taken up at ground No. 4 by the assessee, we hereby hold that the taxable profits may be computed in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on holidays during their visits in India; (iv) the Hotel premises or employees of the Hotel owners are not at the disposal of the Appellant; (v) the Appellant does not provide any Central Reservation Services; and (vi) the Appellant is not involved in any day to day operations of hotels and provides only strategic oversight services. The Appellant prays that all the conclusions reached by the AO / DRP of the Appellant constituting a PE in India under Article 5 of the Tax Treaty are erroneous, unwarranted and be deleted. Ground No. 2- Erroneously attribution of profits to alleged PE of the Appellant in India. 2. Without prejudice to Ground No. 1 above, on the facts and circumstances of the case and in law, the AO / DRP erred in arbitrarily adopting 25 percent of the gross receipts as taxable income attributable to the Appellant s alleged PE in India under Article 7 of the Tax Treaty without appreciating that i) the entire activities are not carried on from India and the Appellant primarily operates from outside India i.e. UAE; and ii) even if it is held that profits are attributable then the same should be restricted only in relation to activities carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record. We find that identical issue raised in the present appeal has been adjudicated in ITA No. 727/Del/2017 for Assessment Year 2013-14. The relevant portion of the order of Tribunal (supra) is reproduced as under: 4. For the sake of ready reference and convenience, operative part of the order dated 04.12.2019 in ITA No. 579/Del/2013, 779/ Del/2014,1762/ Del/ 2015 and 957/Del/2016 is being reproduced herewith. 56. We find that from the concurrent reading of the Strategic Oversight Agreements (SOA), the assessee has been technically operating the hotel belonging to the owners namely, Asian Hotels Ltd, (AHL) through the. employees, who are recruited by them. The hotel premises have been at the disposal of the assessee during their period of stay. The employees has stayed for a period of 158 days as per the assessee in India while rendering the services. In terms of OECD commentary on Article 5(1) the assessee can be said to be having a permanent establishment owing to existence of a place of business i.e. a facility such as premises, and that place was fixed and established as a distinct place with certain degree of permanence and the foreign enterprise ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and the work executed, that the premises of AHL was very much at the disposal of the assessee for carrying on their business. Thus, we find that the assessee has met the twin criterion of existence of a fixed place of business and carrying out of business from such fixed place of business as enunciated of the judgment of Hon'ble Supreme Court in the case of Morgan Stanley Co. 292 ITR 416 (SC). The claim of the assessee that they did not have a place at their disposal cannot be accepted in view of the judgment of Hon'ble Supreme Court in the case of Formula One World Championships Ltd. 394 ITR 80, in the case of Azadi Bachao Andolan and also E-funds IT Solutions 86 Taxman 240. The facts on record undisputedly prove that the premises AHL are at the disposal of the assessee for conduct of their business. While coming to the issue of at the disposal in the premises is available for the assessee for running of their business even for a limited time it constitutes a PE . 4.1 Accordingly, following the finding of Tribunal (supra), the Ground No. 1 of the appeal is decided against the assessee. The Ground No. 1 is accordingly dismissed. 7. On finding parity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to decide the issue afresh in line with the directions given by this Tribunal in earlier assessment years after affording a reasonable and adequate opportunity of being heard to the assessee. 10. In ITA No. 712/Del/2021 for A.Y. 2017-18 the assessee has raised one additional ground No. 4 which reads as under :- Ground No. 4 - Erroneous dismissal of DRP rectification application and passing DRP directions, without considering the Appellant s submission on profit attribution to be computed as per the directions of the IT AT in Appellant s own case for AY 2009-10 to AY 2012-13 4. Without prejudice to Ground No. 1, 2 and 3 above, the DRP erred in passing its directions without considering Appellant s submission on profit attribution to be computed as per the directions of the ITAT in Appellant s own case for AY 2009-10 to AY 2012-13 and dismissing the rectification application filed by the Appellant in this regard. The Appellant prays that such adhoc attribution of 25 percent to the alleged PE is erroneous and warrants relief as sought by the Appellant before the DRP. 11. Since the underlying facts in the issues have been restored back to the file ..... 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